recommends a certain number of battleships to be ready at a certain date, but specifies year by year the number to be begun and the amounts to be expended. The following is the program recommended, and I hope Congress will indorse it by so large a vote of its members as to make certain its continuance by Congresses to come:

If this program is carried out, accepting the General Board estimates of survival for present vessels, the Navy would be composed of the following vessels, built or building, in 1921:

In planning this program, involving for a number of years a greatly increased annual expenditure upon new construction, it became necessary to consider carefully its annual distribution.

The General Board was called upon for advice in this connection, and the department has accepted its recommendations as regards numbers of capital ships. As regards their distribution over a fiveyear period, it was concluded, in view of all the circumstances, that it would be best to make this as nearly uniform as might be. This course has obvious practical advantages, particularly in view of the present congested condition of the shipbuilding industry in this country. Moreover, since the maximum rate of expenditure upon the capital ships, which take some years to build in any case, will not be reached immediately, it enables us to concentrate more at first upon submarines and other quickly-built craft, so that we will get earlier returns for our expenditure in the shape of completed vessels.

My recommendation of a five-year program embraces the same number as proposed by the General Board in the distribution it made in the five-year program of dreadnaughts, battle cruisers, scouts, and destroyers. I recommend 15 fleet submarines where the General Board recommends 9, and I recommend 85 coast submarines as against 58 recommended by the General Board. For additional reserve ammunition, my recommendation is $25,000,000, whereas the General Board recommends $11,000,000. They recommend something more for other craft. My total for the five years is $502,482,214. The General Board's total is $199,876,000, a very slight difference for the five years, though the board's recommendation for the first year is much larger than the department's estimate.

As regards the battleships included in the program, the characteristics recommended for them by the General Board involved a very material increase in displacement over our previous battleships, which are themselves larger than those built or building by any other nation. While allowing in the program the estimated cost of these enormous vessels, the department has not finally approved them. As a definite determination of their exact characteristics is not necessary at this time and as to-morrow's developments abroad may require modifications of their characteristics, the department feels it necessary to give this question most careful investigation and consideration.

It will be observed that the proposed program for new construction includes a substantial number of battle cruisers and scouts. The former type has not hitherto been included in the estimates of the department or authorized by Congress. Of the latter, we have now upon the Navy list but three representatives, authorized April 27, 1904, and now out of date. It is believed that, in the light of recent events, it is necessary to expand the program to include these types of vessels if the Navy is to be prepared to meet contingencies certain to confront it in case of war.

In the early months of the present war, the world witnessed a demonstration of what could be accomplished in the direction of commerce destruction by a limited number of small vessels operating in the open and deprived of shore bases for refueling, refitting, and refuge. The small, fast vessels of the German Navy thus engaged were able to overhaul merchantmen with ease, and at the same time to avoid, for a considerable period, the numerous vessels endeavoring to capture or destroy them. Three of the German cruisers eventually formed a junction with the Scharnhorst and Gneisenau, of the armored cruiser class, which may be considered the predecessor of the battle cruiser of to-day. An encounter off Coronel, Chile, November 1, 1914, between this small squadron and an inferior division of English vessels of earlier types, such as now exist in the United States Navy, ended disastrously for the English; but when two battle cruisers, with other vessels, encountered this same squadron at the Falkland Islands, December 8, 1914, the German ships found themselves unable to cope with the superior power and unable to escape from the superior speed of the battle cruisers. Moreover, the superior speed of the battle cruisers had much strategic value in that it enabled them to reach with great promptness their field of action.

It is a notable fact that in every naval event of consequence which has occurred in the North Sea area the leading parts have been taken by vessels of the battle-cruiser and scout types, and it is evident that had either side lacked such vessels it would have been at a disadvantage. When the battle-cruiser type was first brought out, it was argued that it could lie in the line with battleships and be used as a battleship upon occasion. Experience of the war, however, seems to indicate that their primary function will be in independent action, and that if a possible antagonist is possessed of any material number of vessels whose speed enables them to certainly elude the battleship, and which are so powerful that they need not apprehend torpedo craft, it is necessary to have the battle cruiser to cope with them.

While, under the conditions of the past, attacks upon the over-seas merchant marine of the United States, in case of war, would have done little damage owing to its limited size, it is to be hoped that by the time these vessels are built our over-seas merchant marine will be more extensive. Apart from this, it will be absolutely necessary in case of war to prevent the light, fast vessels of the enemy from committing depredations on the United States coast and destroying the auxiliary and supply vessels of the fleet.

In addition to the illuminating experience of the present war, it may be pointed out that several times during the last year or 18 months careful war maneuvers have been undertaken by the United States Navy for the purpose of investigating its present capacity for defending this country against hostile attack. It is practically the

unanimous opinion of the responsible officers who engaged in these maneuvers that, for the defense in question, an adequate supply of proper scouts is essential. Improvised scouts, such as destroyers, are not satisfactory. It is necessary that the scout should be a vessel designed for scouting duties and sufficiently large and robust to be able to do its work practically without regard to weather conditions. In case of war, the country having the superior fleet will probably control the sea, but experience has demonstrated the fact that fast cruisers may keep the sea for an indefinite period, obtaining supplies and coal from captured merchantmen and in the meantime do an inestimable damage to the commerce and lines of communication of the country with the more powerful navy. Without fast cruisers of equal or greater power, both in speed and armament, the real control of the sea and protection to commerce and lines of communication can not be assured. In actual fleet operations, a problem such as must confront the United States in case of war with an overseas enemy, the fast cruiser becomes the eyes of the fleet, and to it the commander in chief must look for his information of the whereabouts and movements of the enemy's fleet; to insure success our eyes must at least be equal if not superior to the eyes of the enemy; in other words, our fast cruisers must be equal to if not superior to those of the enemy.

ESTIMATES FOR THE YEAR.

The recommendation for a five-year program of new construction, calling for $100,000,000 a year for five years, depends upon congressional approval. The estimates for the next fiscal year embrace the increased appropriations which must be made by the first session of the Sixty-fourth Congress if it approves the new construction recommended for the first year of the program, and also the increased cost for additional personnel and the items necessary for the pay of the Naval Establishment. For the coming year $28,369,127 is recommended to continue the ships authorized by the Sixty-third Congress and $57,003,000 to begin the work on the new construction which it is hoped this Congress will authorize. This makes $85,372,127 for "increase of the Navy." The estimates for increased personnel and all other needs of the Navy amount to $132,280,047.24. The aggregate estimates are $217,652,174.24. They may be reduced if it is decided to continue to build dreadnaughts of substantially the California type instead of going to the construction of the much larger superdreadnaughts suggested by the General Board. My estimates are for the biggest ships. But such estimates are tentative; and if the larger type of battleship is not approved, they will be considerably reduced. Bids opened on November 17 for battleships 43 and 44 show an increase-a considerable increase-over the bids for

the Idaho and Mississippi. If we go to the suggested very large dreadnaughts, the price will be correspondingly larger. The latest bids by private companies, both as to price and time of completion, imperatively demand the equipping of several navy yards for the quick construction of dreadnaughts. Even with economy of construction the cost will be great. In comparison with the enormous expenditures abroad, the large expenditure is necessary if our fleet is to be able to enforce American policies. The lesson of the European war warns us that it is better to spend money in times of peace for preparation than to run the risk, however remote, of sorely wanting ships and munitions if suddenly needed.

OPERATIONS:

BETTER ORGANIZATION EFFECTED.

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Upon my recommendation the naval appropriation act of 1915 provided that "there shall be a Chief of Naval Operations who shall, under the direction of the Secretary of the Navy, be charged with the operations of the fleet and with the preparation and readiness of plans for its use in war." Navy Regulations pursuant thereto provide that the duties of the Chief of Naval Operations "shall include the direction of the Naval War College, the Office of Naval Intelligence, the Office of Target Practice and Engineering Competitions; the operation of the Radio Service and of other systems of communication, of the naval defense districts, and of the Coast Guard when operating with the Navy; the direction of all strategic and tactical matters, organization, maneuvers, target practice, drills and exercises, and of the training of the fleet for war and the preparation, revision, and enforcement of all tactic drill books, signal codes, and cipher codes." These regulations recognize and utilize all existing departmental machinery, at the same time giving the broadest scope to the new official for perfecting necessary war plans. To that end the regulations further provide that "in preparing and maintaining in readiness plans for the use of the fleet in war, he shall freely consult with and have the advice and assistance of the various bureaus, boards, and officers of the department, including the Marine Corps headquarters, in matters coming under their cognizance. After the approval of any given war plans by the Secretary, it shall be the duty of the Chief of Naval Operations to assign to the bureaus, boards, and offices such parts thereof as may be needed for the intelligent carrying out of their respective duties in regard to such plans."

Capt. William Shepherd Benson was transferred from the command of the navy yard at Philadelphia to fill the office of Chief of Naval Operations. A comprehensive and efficient system has been